Europe closes with gains for fourth straight session

Miners advance as gold futures top $1,000 mark; telecoms also higher

SarahTurner

LONDON (MarketWatch) -- European shares rose for a fourth straight session Tuesday, with miners getting a lift from stronger gold prices and deal-making also helping the latest advance in equities.

The pan-European Dow Jones Stoxx 600 index (SXXP) rose 0.2% to 237.75, with miners in the lead as gold futures reclaimed the $1,000-an-ounce level in electronic trading for the first time in more than six months. Read more on gold futures.

Helping the sector to advance were shares of Randgold Resources (RRS), up 3.2%, as well as Rio Tinto (RIO)
RIO, -2.30%
up 3.6%, and BHP Billiton (BLT)
BHP, -1.08%
up 2.6%.

Gold has been supported by several factors lately, including a weaker dollar, said Johan Javeus, chief foreign-exchange strategist at SEB in Stockholm.

"Commodities do well when the dollar is weak because they are priced in dollars," he said. The euro and sterling both traded higher against the dollar on Tuesday, helped by some surprisingly strong data on U.K. manufacturing output. See full story.

"Things are pointing to a V-shaped recovery, not this slow recovery that many are scared about," Javeus said. "The equity move is probably well sustained as the recovery is quite strong and we have very low interest rates," he added.

At the regional level, the U.K.'s FTSE 100 index (UKX) closed up 0.3% to 4,947.34, the German DAX index (1876534) added 0.3% to 5,481.73 and the French CAC-40 index (PX1) moved up 0.2% to 3,660.96.

Asian equity markets gained, while U.S. stocks were higher in early trading as traders returned from a long holiday weekend.

Deal-making and speculation helped European shares to a strong finish on Monday, with the Stoxx 600 index showing a 1.4% gain at the close.

M&A-related gains also played a part on Tuesday, with shares of France Telecom (FTE)
FTE, -2.32%
up 1.8% and Deutsche Telekom (DTE)
DT
up 1.9%.

The companies said that they will combine their U.K. wireless operations in a joint venture to create the top operator in the U.K. See full story.

On Monday, the chocolate maker rejected a bid of 745 pence a share from U.S. blue chip Kraft Foods
KFT
leading to speculation about a potential bidding war that would yield a higher offer. Read more on Cadbury.

Kingfisher in focus

Shares of Kingfisher (KGF) climbed 0.5% in London on Tuesday, gaining after the home-improvement retailer rushed out "indicative" interim figures following a leak on Monday afternoon.

Kingfisher said that it expects adjusted pretax profit in a range of 285 million pounds to 290 million pounds for the six months ended Aug. 1. For the same period last year, the firm posted an adjusted pretax profit of 214 million pounds.

"We had expected first-half pretax profit of 'only' 271 million pounds, up 27% on last year, so today's news is pleasing and is driven by an approximate 20 million pound beat on B&Q profits," said Nick Bubb, analyst at Pali International.

Technology stocks also traded generally stronger.

"With valuations for some stocks and sub-sectors still sitting below the mid-cycle level, we remain positively disposed albeit on a selective basis," said Deutsche Bank in upgrading ratings on several firms.

"The early-cycle semis stocks seem to be looking through 2010 already, structural challenge hold us back in telecoms equipment, while most of our positive calls sit within the software and IT services sector," the broker said.

Shares of Temonos Group (TEMN), which was upgraded to buy, rallied 5.1%, while Dassault Systemes (DSY), which also was raised to buy, climbed 4.2%.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.